Supreme Court Asked to Expand Defenses to Patent Infringement

IGT v. Aristocrat Tech of Australia (on petition for certiorari)

Every year, the PTO revives hundreds of unintentionally abandoned patent applications, and about half of those eventually issue as patents (not counting continuations and other descendants).

In the IGT case, the gaming-manufacturer was sued for allegedly infringing two of Aristrocrat's slot-machine patents. The first patent stemmed from an Australian provisional application that was followed by an international PCT filing. At the national stage in the US, the applicant missed the filing deadline but was able to convince the PTO to revive the application as unintentionally abandoned. The second patent is a continuation from the first.

In court, IGT has argued the revival was improper and thus, that the patents are invalid. IGT reasoned (and the district court agreed) that the revival was improper because the PTO lacked authority to revive national stage applications that were unintentionally filed late. Rather, the statute arguably only allows revival of applications upon proof that the tardiness was unavoidable.

Without determining the proper scope of the PTO's revival authority, the Federal Circuit rejected IGT's argument - holding that improper revival is not a "cognizable defense" to patent infringement and reminding defendants that a patent is not invalid simply because the PTO erred in issuing the patent.

Enumerated Defenses in Litigation: Section 282 of the Patent Act defines the defenses available against charges of patent infringement. These enumerated defenses include:

1. Noninfringement …,
2. Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for patentability,
3. Invalidity of the patent or any claim in suit for failure to comply with any requirement of sections 112 or 251 of this title.
4. Any other fact or act made a defense by this title.

In its analysis, the Federal Circuit found that improper revival did not fall within any of the four categories of defenses - and thus cannot be raised as a litigation defense. The case implicitly calls into question other traditional defenses such as nonstatutory double patenting, improper inventorship. IGT argues that the decision also implies that a defendant could not challenge a patent based on its expiration due to failure to pay maintenance fees. Of course, a defendant should have some mechanism for challenging an improperly revived patent - either through the courts or a post-grant procedure at the PTO. Under the Federal Circuit's rule, however, a typical defendant would have no recourse. (Two potential avenues could be (1) inequitable conduct in the revival and (2) trigger an interference.)

Leaving the PTO's revival grant's unchallengeable is particularly troublesome because of the serious lack of transparency in the petitions office. Pre-grant revivals are tucked away in individual prosecution file wrappers and cannot be searched in any public database. Thus, the public is left without any check on the system at either the micro or macro level.

Petition for Certiorari: IGT has petitioned the Supreme Court for a writ of certiorari and has garnered the support of the group of usual defendants (Cisco, Dell, Google, Microsoft, etc.) with the simple question:

Whether a patent infringement defendant may assert as a defense the fact that the patent resulted from an abandoned application that was not revived according to the requirements prescribed by Congress.

In several ways, this cases parallels the other recent Supreme Court patent cases such as KSR, eBay, and MedImmune. At least as history tells the story, each of those cases began with a rigid rule created by the Federal Circuit to favor patent holders. In each case, the Supreme Court softened the rule to add flexibility in a way that favors the defendants. In KSR, the rigid TSM test for applying multiple references during obviousness analysis was relaxed. In eBay, the rule strongly favoring injunctive relief was relaxed. And, in MedImmune, the rule setting a reasonable apprehension of a lawsuit as a condition precedent to a declaratory judgment action was also relaxed. In the IGT case at hand, the Supreme Court has the opportunity to tear down another rigid application of the law and open a new avenue for defendants to challenge a patent holder's rights.

Invalidity of the patent or any claim: Although slightly off-topic, I am intrigued by the wording of Section 282, which creates the defense of "invalidity of the patent or any claim." (Emphasis added). Ordinary validity issues focus on individual claims. Is the claim anticipated or obvious? Is the claim definite, fully described, and enabled, and does it properly claim patentable subject matter? The general focus on the validity of claims begs the question of what we mean by "invalidity of the patent." IGT's theory of invalidity based on improper revival is bolstered here because it would breathe meaning into the statutory invalid "patent."

Aristocrat's opposition and any amici in opposition are due April 22.

Briefs:

• IGTSupremeCt.pdf
• IGTamicus.pdf

Related Posts:

• Dennis Crouch, Erroneous Revival by PTO is not a Cognizable Defense in an Infringement Action, Patently-O (Sept. 22, 2008)
• Dennis Crouch, CAFC to Decide Important Revival Case: Aristocrat v. IGT, Patently-O (Dec. 12, 2007)
• Dennis Crouch, No Revival For "Unintentional" Missed National Stage Filing Date (Delay Must Be Unavoidable), Patently-O (Jul. 26, 2007)
• Dennis Crouch, Reviving Unintentionally Abandoned Patent Applications, Patently-O (Feb. 26, 2008)
• Dennis Crouch, IGT Petitions for En Banc Rehearing: Asking Court to Allow Invalidity Defense for “Improper Revival”, Patently-O (Oct. 7, 2008)
• Dennis Crouch, Reinstating Patents After Failure to Pay Maintenance Fee, Patently-O (Feb. 26, 2009)
• I mentioned above that improper revival could be challenged in the course of an interference. Chico Gholz pointed me to his 2009 IP Today article addressing the issue: Aristocrat V. IGT: Another Reason Why Provoking An Interference May Be Preferable To Defending An Infringement Action. Of course, as one comment already indicates, interferences are severely time-limited.
  

Comments

[Inviting body punches]

Without intending to be flippant, 282 "invalidity of a patent" may apply only to a patent with a single claim.

This situation is akin to that created by 37 CFR 1.56--the duty of disclosure "exists with respect to each pending claim", yet an entire patent can be ruled unenforceable for failing to meet the duty with respect to only a single claim.

Maybe this proposed defense, or any defense that goes to the patent as a whole, would be better characterized within the realm of unenforceability than invalidity.

More of the same inarticulation that PERVADES U.S. patent law.

[Dan Feigelson]

Dennis, forcing an interference would be an interesting way to try to get the PTO to revisit a revival that one considers to have been improper. However, given the one-year window to file claims copied from a granted patent or published application, this course of action will be unavailable to competitors who only decide to enter the market after the window has closed.

[Paul F. Morgan]

I wonder why why other members of the CAFC [who are circulated the panel decisions] did not sua sponte request taking a surprising panel decision of this scope and impact en banc, rather than risking yet another thrashing from the Supreme Court?

[Breadcrumbs]

Is this another forum for the USPTO's "substantial" versus "procedural" debate?

Clearly, this is a procedure before the Office and just as clearly, this involves an item of substance.

Perhaps the Supremes will provide a hint (especially if one of the amici include the latest CAFC decision in its arguments).

[6]

"Is this another forum for the USPTO's "substantial" versus "procedural" debate?"

Almost, but not really. I thought about that as well though.

Agency action is agency action, not all of them are appealable/etc.

Cert Denied. 100 to 1.

[TJ]

I can think of at least two types of "invalidity of the patent" without much regard to the claims: lack of utility and failure to disclose best mode.

[TJ]

The petitioner might also really want to look at McKechnie Vehicle Components USA, Inc. v. Lacks Industries, Inc., 122 Fed. Appx. 482 (Fed. Cir. 2005), where the Federal Circuit sua sponte directed the district court to invalidate an improperly issued patent. Sure it is an unpublished case, but it is pretty hard to reconcile with this one.

[Malcolm Mooney]

Without determining the proper scope of the PTO's revival authority, the Federal Circuit rejected IGT's argument - holding that improper revival is not a "cognizable defense" to patent infringement and reminding defendants that an patent is not invalid simply because the PTO erred in issuing the patent.

Even the Federal Circuit enjoys beating a strawman every once in a while.

Nobody was arguing that the patent was invalid "because the PTO erred." The argument is that the patent is invalid *in spite of* the PTO's error.

[Malcolm Mooney]

[first paragraph in previous comment should be in quotes]

[Paul F. Morgan]

Section 282 says "The following shall be defenses" not "The following shall be the only defenses" or "The following are the defenses"

[A]

"The case implicitly calls into question other traditional defenses such as nonstatutory double patenting, improper inventorship"..

wondering how "nonstatutory double patenting" defense operates in US...given that method and product claims can form subject matter of two distinct patent applications.

Could someone please point to a caselaw.

[SH]

DC, please consider hyperlinks when making references to section in your posts - this would make navigation easy

[patent leather]

I doubt the Supremes will take this case. They only grant cert for 2% of the petitions they receive, and this case just doesn't seem to be important enough in my opinion. If they want to hear a patent case this year, they will take Bilski.

Besides, except for those of us who truly dislike our patent system, this was a good result and should be left alone. Accidents can happen (I've seen unintentional abandonments even at the top firms) and there is no need to severely punish the applicant and attorney.

[me]

This case is a failure at 30 month's from the PCT filing - which used to be an unfixable miss - now though, the PCT REQUIRES countries to put in saving language for cases such as this. Does that matter? Maybe not, but I do think it goes to the intent of the PCT and it's 30 month date - namely it is not meant to be a hard inflexible date with no save.

[Common Sense]

I wonder if I can give my career a boost by starting a blog a citing myself all day.

The fact is under well accepted principles of equity valuable rights, in this case patent rights, should not fail due to inadvertent error, whether unavoidable or unintentional, that is within the statutory discretion of the PTO to allow cure.

Its like saying that Mooney's house or cardboard box or whatever should be taken from him because he didn't file a deed within a particular timeframe.

[6]

"I wonder if I can give my career a boost by starting a blog a citing myself all day."

If you're as awesome as D then you can go right ahead.

"Its like saying that Mooney's house or cardboard box or whatever should be taken from him because he didn't file a deed within a particular timeframe. "

Funny you should mention that since many counties feel that it is within their right to take your vehicle if you do not register it. And I mean even if you aren't driving it around. It is ludicrous. One man stood to stop it one day in Fairfax in 07', and he prevailed, so they changed the law so that it blatantly doesn't protect equally, thus furthering his actual agenda, application of the 14th amendment. Thus far I haven't heard of him forcing the issue though. I looked him up and had considered calling him but then lost interest in the issue. Still, I will remember that issue and how it discriminates against people who rent and don't have a private garage to put their car in.

[TheManWhoWatches]

IGT will not prevail, because it would mean all the fees paid to the USPTO would be an unjustified taking and would have to be returned. It would bankrupt the USPTO, unless of course they received a bailout like all the other moronic individuals who went to high and mighty schools that specialized in showing ways to undermine the Republic and conferred J.D.s and MBAs in how fleece the average taxpayer. Q.E.D.

[Inviting body punches]

Sense--

The application of equitable principles here is why I suggested that this situation be more fruitfully considered as unenforceability rather than invalidity, under an IC paradigm that more accurately reflects and applies the principles of equity than does the brief codification in 37 CFR 1.56

[Malcolm Mooney]

"Accidents can happen (I've seen unintentional abandonments even at the top firms) and there is no need to severely punish the applicant and attorney."

Boo hoo hoo hoo hoo hoo!!!!!!!!!!!! All we did was miss a bar date! Don't punish us, your honor!

[Lionel Hutz]

Digression - DC stated the following:

"Pre-grant revivals are tucked away in individual prosecution file wrappers and cannot be searched in any public database"

Aren't they visible in PAIR? Wouldn't one of the first places an accused infringer go be the file wrapper? Why would there be a general need to be able to track such certificates.

If they are not in PAIR, that is a serious absence of transparency.

[EG]

I wouldn't hold my breath on SCOTUS granting cert on this one unless they ask the U.S. Solicitor General whether cert should be granted. Both the IGT petition, as well as the amicus brief, overstate the "significance" of the specific issue here, namely challenging, in litigation, an allegedly improvidently granted petition by the USPTO for "unintentitional abandonment." It's not even certain whether the district court correctly ruled that such petitions are not contemplated, at least indirecly, by the petition fee payment section(s) of Title 35. The frequency with which a revival of an unintentional abandonment under these circumstances involving a litigated patent will be few and far between, which hardly makes it a "signifant" issue requiring SCOTUS review. If SCOTUS wants to grant cert on what "defenses" are contemplated by 35 USC 282, they'll more likely look for a more significant instance than this one.

[Malcolm Mooney]

I predict the Supremes take this because it's an unbelievably straightforward and easy smackdown that gets mud in the eyes of the PTO, the CAFC and the patentee.

[palin]

So, what is the standard at the PTO for reviving missed PCT national phase deadlines: unavoidable or unintentional?
I wish the Fed Cir had at least answered that questions.

[TheManWhoWatches]

Mr. Mooney your lack of understanding of the patent system amuses me. This especially since all you have to do is remove one vowel from your name to understand the nature of what is at stake for the USPTO. This government has not done anything that will cost it money since the Warren Court. We are all serfs here to merely pay those in power for the privilege of spending our grandchildren's freedom-1 billion dollars at a time.

[TheManWhoWatches]

Wait I take that back. I think I have found change happening. http://www.google.com/hostednews/ap/article/ALeqM5hFy28VNLnXKx7L-NGyg_LS217EXgD976N5600

[EG]

"I predict the Supremes take this because it's an unbelievably straightforward and easy smackdown that gets mud in the eyes of the PTO, the CAFC and the patentee."

MM,

As TheManWhoWatches has already said, you're clueless about patent law. Plus you're clueless about what cases SCOTUS will take (and this isn't one of them).

[JTS]

Technically, was the CAFC's statement about the general inabaility to challenge allegedly improper PTO patent grants dicta? IGT raised a specific issue - no PTO authority to revive unintentionally abandoned application. CAFC's sweeping statement wasn't necessary for the holding. CAFC only had to hold (and I think it did) that PTO does in fact have authority, by statute, to revive unintentionally abandoned apps. If the general statement of the CAFC in IGT was in fact dicta, does that affect the likelihood of cert. being granted?

[Malcolm Mooney]

Perhaps the Supremes will simply overturn the decision without comment. That would save everyone a lot of time.

Oh, and EG: put a sock in it, mkay?

[Paul F. Morgan]

Footnote 2 of this CAFC decision specfically states: "Because it is on this basis that we decide the appeal, we do not reach the parties’ alternative arguments, including those relating to whether the Patent Act permits revival for “unintentional”—as opposed to “unavoidable”—delay." {nor, as held later in this decision, via the APA either}
I.e., this decision denies any defendant any right to challenge any patent issued by the PTO from any abandoned application revived by the PTO even if it was revived under the wrong statute in violation of the correct statute!